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Goldman Sachs’s gender problem: In Britain, average pay for female workers is 56 percent lower than for male counterparts

A screen at a trading post on the floor of the New York Stock Exchange is juxtaposed with the Goldman Sachs booth. (Richard Drew/AP)
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In Britain, Goldman Sachs’s female employees receive an average hourly wage that is 56 percent lower than their male counterparts’, the global investment bank said Friday.

The disparity is worse when factoring in the bank’s discretionary bonuses — the lifeblood of many large investment banks. The average bonus for a woman is 72 percent lower than it is for a man, according to the data, which covers more than 6,000 employees.

New York-based Goldman Sachs blamed the pay gap on the lack of women in its highest-paying, senior positions and said it is working to remedy the problem. Currently, women make up 17 percent of the top quartile of the bank’s highest-paid workers in the United Kingdom, according to the report. Starting in 2021, half of the analysts, typically recent college recruits, hired by the firm will be women, the bank said. By 2023, women should represent at least 30 percent of its senior positions, vice president and above.

“While we have made progress in recent years on women’s representation and ethnic and racial diversity, there is still significant progress to be made,” Lloyd Blankfein, Goldman’s chief executive, and David Solomon, the company’s president, said in a memo to employees Thursday.

“At Goldman Sachs we pay women and men in similar roles with similar performance equally. However, the real issue for our firm and many corporations is the underrepresentation of women and diverse professionals both in magnitude and levels of seniority.”

Goldman, one of the world’s most prestigious banks, was required to disclose the pay disparity data under a new British law that will also force many of its competitors, including JPMorgan Chase and Citigroup, to release similar data by April.

The new requirement is creating a potential treasure trove of data, and some U.S. officials are closely watching whether it will prompt companies to change their practices, gender pay experts say. Still, such a drastic change is unlikely in the United States anytime soon, they say.

“I am not sure whether the U.S. is quite ready for that,” said Cheryl Pinarchick, who co-chairs the pay equity practice of the law firm Fisher Phillips.

Efforts to require corporations to disclose similar data in the United States was shelved by the Trump administration last year. The Obama-era rule would have given the Equal Employment Opportunity Commission more tools in its efforts to investigate firms with glaring pay disparities. But the business community strongly opposed the measure, saying it was an unfair regulatory burden and wouldn’t have provided a clear enough picture to detect and address pay disparity problems.

In response to pressure from activist investors, some U.S. banks have begun disclosing gender pay data on their own. Citigroup, for example, said last month that its female workers make 99 percent as much as their male counterparts and that it is taking steps to close the gap. Other banks found a similarly small gender pay gap: JPMorgan and Bank of America said female employees make about 99 percent of what their male counterparts do.

The banks say, unlike the data being reported in Britain, their figures take into consideration seniority, job duties and other issues that could contribute to pay disparities. But gender pay experts say that the information has limited value without knowing more about how the data was collected, including whether it measured bonuses the banks handed out.

The disclosures come as Wall Street continues to struggle to shed its reputation as a boys club. None of the major banks have been led by a woman. A year ago, State Street, a large Boston-based investment bank, installed a statue known as “Fearless Girl” in the shadow of Wall Street’s “Charging Bull,” rekindling debate about gender inequity in the financial world.

[‘Fearless Girl’ ignites debate about art, Wall Street and the lack of female executives]

Banking industry officials said they already follow the laws that require them to pay men and women the same amount for doing similar work. The problem is finding ways to boost women into higher-paying, senior positions, they say.

Women make up 54 percent of HSBC’s workforce but 23 percent of its senior positions, the giant British bank reported last week. The average pay of its female workers was 59 percent lower than their male counterparts’.

“We are confident in our approach to pay and if we identify any pay differences between men and women in similar roles, which cannot be explained by reasons such as performance/behaviour rating or experience, we make appropriate adjustments,” Elaine Arden, head of HSBC’s human resources, said in a statement.